Correlation Between Travelers Companies and Parker-Hannifin Corp

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Travelers Companies and Parker-Hannifin Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Travelers Companies and Parker-Hannifin Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and Parker-Hannifin Corp, you can compare the effects of market volatilities on Travelers Companies and Parker-Hannifin Corp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Travelers Companies with a short position of Parker-Hannifin Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Parker-Hannifin Corp.

Diversification Opportunities for Travelers Companies and Parker-Hannifin Corp

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between Travelers and Parker-Hannifin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies and Parker-Hannifin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parker-Hannifin Corp and Travelers Companies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Travelers Companies are associated (or correlated) with Parker-Hannifin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parker-Hannifin Corp has no effect on the direction of Travelers Companies i.e., Travelers Companies and Parker-Hannifin Corp go up and down completely randomly.

Pair Corralation between Travelers Companies and Parker-Hannifin Corp

Considering the 90-day investment horizon The Travelers Companies is expected to generate 0.61 times more return on investment than Parker-Hannifin Corp. However, The Travelers Companies is 1.65 times less risky than Parker-Hannifin Corp. It trades about -0.28 of its potential returns per unit of risk. Parker-Hannifin Corp is currently generating about -0.31 per unit of risk. If you would invest  16,589  in The Travelers Companies on June 27, 2022 and sell it today you would lose (1,041)  from holding The Travelers Companies or give up 6.28% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

The Travelers Companies  vs.  Parker-Hannifin Corp

 Performance (%) 
       Timeline  
The Travelers Companies 
Travelers Performance
0 of 100
Over the last 90 days The Travelers Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Travelers Companies is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Travelers Price Channel

Parker-Hannifin Corp 
Parker-Hannifin Performance
0 of 100
Over the last 90 days Parker-Hannifin Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Parker-Hannifin Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Parker-Hannifin Price Channel

Travelers Companies and Parker-Hannifin Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Travelers Companies and Parker-Hannifin Corp

The main advantage of trading using opposite Travelers Companies and Parker-Hannifin Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies position performs unexpectedly, Parker-Hannifin Corp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Parker-Hannifin Corp will offset losses from the drop in Parker-Hannifin Corp's long position.
The idea behind The Travelers Companies and Parker-Hannifin Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Parker-Hannifin Corp vs. Industrias Bachoco SA
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go